A Liberal-National Government would potentially allow big business back in to the federal research and development tax incentive, following a review of the current R&D and innovation tax programs.
The Coalition’s Policy to Boost the Competitiveness of Australian Manufacturing, released today, promises $100 million for a range of initiatives design to boost manufacturing in the country.
As part of the policy, the Coalition promised to use the opportunity of scheduled 2014 changes to the R&D tax incentive program, announced by the Gillard Government in February, to review access to the tax support for “many businesses that have been barred from possible access under a series of retrograde cost savings made by Labor”.
It did not break out how much it would spend on the R&D tax incentive review from the $100 million.
The Labor Government cut access to the tax incentive for companies with more than $20 billion in Australia turnover to finance a $1 billion jobs package.
Labor said it had been forced to make some tough choices to fund the package and had decided that “some of the biggest businesses in our nation can forgo an extra research and development tax credit”.
The Coalition said today in its policy document the move was “widely condemned” and represented the “first decision of its type anywhere in the world.”
“The Coalition places a completely different emphasis on the importance of increased commercial R&D in Australia. At a time when there is a clear and increasing need for Australian businesses to compete globally on the basis of ingenuity and innovation, we need to be encouraging growth in R&D.”
It promised to review the potential for creating a second stream of the R&D tax incentive, “based more closely on the definitions and eligibility criteria of the former R&D Tax Concession”, potentially allowing the major banks, miners and pharmaceutical companies that had been cut from the program in February back in.
It would release a taxation whitepaper studying the “effectiveness of existing taxation incentives for innovation and industry funded research” and would develop recommendations for improving the incentive regime for innovation and R&D investment.